Sears Says More Appliance Share Loss Possible
Mar 22, 2004
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Sears, Roebuck and Co. (Hoffman Estates, IL, U.S.) says it could lose more market share in appliances, a category in which it is the number 1 U.S. retailer, as it faces competition from home improvement chains The Home Depot Inc. and Lowe's Cos. Inc.

"Until we're in a position to grow our store base more rapidly, it is possible that we in fact do have some continued market share losses," CEO Alan Lacy told the Reuters Consumer Products and Retail Summit.

Sears saw its dominant market share in appliances decline for the first time in 2002, and industry figures now put it at about 38 percent. By contrast, Lowe's and Home Depot have picked up market share as it has added stores across the United States.

Lowe's is the second-largest appliance retailer and The Home Depot is now third, having moved ahead of Best Buy Co. Inc.

Lacy said Sears faced competition from big-box retailers in off-mall locations.

"Customers aren't going to drive by a Home Depot, Lowe's, Best Buy, Target, Wal-Mart, Kohl's, et cetera, as often as they maybe used to, to get to the mall to shop us," Mr. Lacy said. "Those boxes are relatively good choices in many categories."

At the summit, held at Reuters U.S. headquarters in New York, U.S. Mr. Lacy said Sears was looking to address the consumer move to off-mall shopping partly by adding Sears Grand stores -- big-box standalone stores that offer a wider variety of goods. But he acknowledged that Sears would likely face competition for store sites from other retailers.

Mr. Lacy said Lowe's and Home Depot have gained share by adding stores and serving buyers who are not overly concerned about appliance brands or service.

He said moves that Sears took last year to revamp its appliance offerings were paying off, including expanding next-day delivery and stocking more lower-priced appliances.

"Since these changes, we've seen mid-single-digit growth in unit volume in our business," Mr. Lacy noted. But Kenmore, the retailer's proprietary appliance brand, lost market share last year as Sears increased focus on national brands, he said.

Best Buy CEO Brad Anderson told the summit his company had no plans to exit the appliance business as its market share comes under pressure. But he said Best Buy had not yet decided to devote more resources to improving its appliance operations.

"We've got stores that look like that if we deployed what we learned, we'd do much better in the appliance business, but it would take a lot of energy to move into that space," Mr. Anderson

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